Questions and Answers - December 6

1.
LOUISE UPSTON (National—Taupō) to the
Minister of Finance: What reports has he
received on the economy?

Hon BILL ENGLISH
(Minister of Finance): This morning the Reserve
Bank issued its Monetary Policy Statement for December. It
confirmed that the official cash rate has remained unchanged
at 2.5 percent, supported by the Government’s fiscal
policy and reducing offshore financing costs. This will help
keep New Zealanders’ interest rates lower for longer. A
family with a $200,000 floating rate mortgage is now paying
$200 a week less in interest costs than they were 4 years
ago. It is a significant saving in difficult times that is
enabling them to further reduce their debt. The Monetary
Policy Statement today presented a similar overall economic
outlook to the previous statement in September. The outlook
is slightly weaker in the near term, but activity is
expected to be stronger in 2014-15.

Louise
Upston: What does the Reserve Bank say about the
cost of living and forecasts for the consumer price
inflation?

Hon BILL ENGLISH: Current CPI
inflation is at 0.8 percent, which is the lowest it has been
in nearly 13 years. The Reserve Bank expects inflation to
remain comfortably within the target band. That is good news
for families who are trying to save and get ahead. They have
got the lowest interest rates on mortgages in around 40
years and the lowest inflation in 13 years. The strong New
Zealand dollar is helping to keep tradable sector inflation
low, as is the spare capacity in the
economy.

Louise Upston: What are the
Reserve Bank’s forecasts for economic growth over the next
3 years, and what are the main factors behind those
forecasts?

Hon BILL ENGLISH: The bank
projects annual real GDP growth of 2.2 percent, 2.8 percent,
and 2.9 percent respectively over the next 3 years. The
forecasts are a little weaker in the short term, but are
higher over year 2 and year 3. This is consistent with the
recent history of the economy ticking along at growth rates
of around 2 or 3 percent. The bank noted four key factors
influencing the outlook: the Canterbury rebuild, that global
economic activity and inflation are expected to remain
subdued, that the kiwi dollar is expected to remain high,
and that tighter fiscal policy is expected to dampen
demand.

Hon David Parker: Given today’s
news that the Governor of the Reserve Bank is negotiating
the use of macro-prudential tools like loan-to-valuation
ratios, does he now admit that for the last 4 years he was
wrong in saying that our monetary policy required no change,
because it was already world’s best
practice?

Hon BILL ENGLISH: No. In fact,
I have been part of those negotiations for the last 4
years.

Louise Upston: What impact has
the uncertain global economic situation had on the Reserve
Bank’s outlook for the economy?

Hon BILL
ENGLISH: It continues to have a significant bearing
on the outlook for New Zealand and at times, I think, on
confidence in New Zealand. The euro area remains in
recession, growth prospects are seen to be improving in the
US and China, but the international economy continues to
weigh on our prospects. It would certainly be helpful for
everybody if the US was able to resolve its current issues
around its fiscal deficit, its fiscal policy, and its debt
ceiling. If that occurred, the US economy may do better next
year than expected, and, as the world’s largest economy,
that would certainly help us.

Tertiary
Education—Foundation Level Course
Providers

2. GRANT ROBERTSON (Deputy
Leader—Labour) to the Minister for
Tertiary

Education, Skills and
Employment: Does he stand by his statement that
those providers who have received funding for foundation
level courses in the recent contestable process were chosen
because of their ability to “deliver to those most at need
of foundation education programmes”?

Hon STEVEN
JOYCE (Minister for Tertiary Education, Skills and
Employment): Yes, and in doing so I would like to
point out to the member that in 2011 around 60 percent of
people enrolled at level 1 and 2 programmes already, in
fact, held a National Certificate of Education Achievement
level 2 qualification or higher. So one of the changes of
the level 1 and 2 provision is to focus it on second-chance
learners who can most benefit from it. So, yes, again, we do
need to fund providers that are able to get people in the
door and deliver to those most at need of foundation
education programmes.

Grant Robertson:
What action has he taken in response to the comments from
Manukau Institute of Technology Chief Executive, Peter
Brothers, who said: “We have been approached by some PTEs
who are looking to buy curriculum and teaching materials
from us because they bid for courses they have not
previously been teaching.”?

Hon STEVEN
JOYCE: Well, it may come as a surprise to the
member that all the time providers start courses that they
have not previously been teaching. The point to the
member—

Grant Robertson: So they’re
qualified to teach it, are they?

Hon STEVEN
JOYCE: It is important to point out that—and I
appreciate that Labour Party members are very focused on the
public sector union, so this is pretty much something that
they need to focus on—the focus here is on providers that
can deliver foundation education. Their experience includes
things such as Youth Guarantee, Foundation-Focused Training
Opportunities, Youth Training, and subcontracted level 1 and
2 provision.

Grant Robertson: How does a
private training provider who has to ask a local polytech
for curriculum and teaching materials for a course that they
have successfully bid for demonstrate that they have the
ability to deliver to those most at need of foundation
education programmes?

Hon STEVEN JOYCE:
Well, again, I think the member is a little bit blinded by
his approach, but the reality is that private sector
providers do a very good job of providing foundation
education. They may be supplying new courses as part of this
new provision, but many of them, as I said previously, have
been supplying Youth Guarantee, Youth Training,
Foundation-Focused Training Opportunities, and subcontracted
level 1 and 2 provision and are very good at
it.

Grant Robertson: How is it that a
private training provider could be awarded the contract to
deliver a foundation level course but does not have the
teaching or curriculum materials to deliver
it?

Hon STEVEN JOYCE: I do not know how
often I have to repeat this for the member, but, actually,
providers all the time have the opportunity to take up
provision and then set up courses and actually proceed with
those courses. It may sound weird to the member, but it is
sort of how the world works.

Grant
Robertson: Is he aware of the flow-on consequences
of polytechs losing $32 million worth of funding for
foundation courses, which include WelTec cancelling English
for speakers of other languages classes for 80 refugee
students, many of whom will not have the resources to enrol
anywhere else?

Hon STEVEN JOYCE: Again,
the member seems to be completely focused on the idea that
the only good provision in his world is polytechnic
provision, and that is the problem we are dealing with here.
The reality is that the polytech sector has done very well
over the last 4 years. Its income has grown 12 percent. In
terms of this year’s investments by the Tertiary Education
Commission, there are a number of things happening. There
are the new competitive level 1 and 2 programmes, increased
Youth Guarantee places, more trades training, and many
polytechnics are moving up the levels. So what is going on
is a range of things and, yes, providers are changing
courses and it is an entirely appropriate thing for them to
be doing.

Tertiary Education
System—Performance

3. COLIN KING
(National—Kaikōura) to the Minister for
Tertiary Education, Skills
and

Employment: What progress is
the Government making with strengthening the performance of
our tertiary education system?

Hon STEVEN JOYCE
(Minister for Tertiary Education, Skills and
Employment): The Government is making good progress
and is committed to increasing achievement in the tertiary
sector, improving quality, and better matching the
educational provision to the skills needed in the New
Zealand economy and the skills needed by the learners.
Profile and Trends 2011, an annual report on the performance
of the tertiary system that was released today, shows that
we are making steady progress. In particular, the report
shows that people with degrees earn substantially more than
those who do not have degrees. I think it is important to
note, for those considering learning opportunities, that in
2011 people with a Bachelor’s degree or higher
qualification earned, on average, 65 percent more than those
people without a qualification. That is up from 63 percent
in 2010.

Colin King: Does the Profile and
Trends 2011 annual report include any other performance
measures that highlight the progress the Government is
making in the tertiary sector?

Hon STEVEN
JOYCE: Yes. It is actually a very large report,
which has many indicators. I will give just a few
highlights. For the first time in this country’s history,
the majority of New Zealanders—more than 50 percent; 52
percent—now have a tertiary qualification, be it a degree,
diploma, or certificate. The number of people aged 15 years
and over with a Bachelor’s degree or higher qualification
was 17 percent in 2011, and that has been a steady
improvement on 11 percent 10 years ago. Women continue to
outnumber men in holding a Bachelor’s or higher degree,
while men are more likely to have certificates and diplomas.
The number of 16 and 17-year-olds in the Youth Guarantee
scheme grew to just under 3,600 in 2011, and the number of
places will grow to 7,500 in 2012. The report also shows
that enrolments in adult and community education in schools
rose by 16 percent in 2011.

Grant
Robertson: When he triumphantly tweeted:
“Government policy changes in recent Budgets equals
shorter student loan repayments. Medium repayment time now
5.5 years for those staying in New Zealand.”, was he aware
that the previous year it had been 5.2 years, and the year
before that it had been 4.6 years?

Hon STEVEN
JOYCE: I understand that the method of calculation
has changed in the intervening years. But I think the member
makes a good point and it is an important point to
highlight. It is important to note that those who do study
and stay in New Zealand after their study tend to repay
their student loans in just about 5.5 years. I think that is
a very good record to show that we achieve in this country.
And actually there is an improvement for Bachelor’s and
higher degrees; they actually pay them off in a shorter
period again.

Grant Robertson: I seek
leave of the House to table from Steven Joyce’s Facebook
page his comment that Government policy changes in recent
Budgets equal shorter student repayment times. This would
normally be publicly available, but Mr Joyce has so few
friends I think we had better put it out there.

Mr
SPEAKER: Leave is sought to table that document. Is
there any objection? There is no objection. Document, by
leave, laid on the Table of the House.

Government
Financial Position—Current Account Deficit
Forecasts

4. Hon DAVID PARKER (Labour)
to the Minister of Finance: Does
he stand by his statement that “I just don’t think the
world will let us run 7 and 8 percent current account
deficits. It just won’t. I think you’d get the kind of
sharp adjustment that the textbooks tell you would happen in
the exchange rate or interest rates”; if so, has he seen
NZIER’s forecast for New Zealand’s current account
deficit as a percentage of GDP for 2014 and
2017?

Hon BILL ENGLISH (Minister of
Finance): Yes, I do stand by my statement. In
answer to the second part of the question, I have not seen
its forecast, but the Reserve Bank this morning noted that
the current account deficit has improved significantly since
it was around or above 8 percent of GDP between 2006 and
2008. It forecasts the deficit to be between 5 and 5.5
percent of GDP over the next 3 years—a significant
improvement on the record levels of current account deficit
that applied under Labour’s period up to
2008.

Hon David Parker: Does he agree
that international credit rating agencies are less tolerant
of large current account deficits than before the global
financial crisis?

Hon BILL ENGLISH: Yes,
I do, and that is why we have been pursuing a mix of
policies that can, in the end, have only an indirect
influence on the current account deficit, to repair the
damage done by the previous Government—

Hon David
Parker: Why, if he is sticking to a plan that is
working, is the current account deficit forecast by the IMF
to be the worst in the developed world next year, and
forecast by the New Zealand Institute of Economic Research
to get worse, to negative 8 percent of GDP within 2 years
and negative 9.9 percent of GDP in 5 years?

Hon
BILL ENGLISH: We are pursuing a bunch of policies
that, as I said, can indirectly influence the current
account deficit—because we cannot influence it directly.
They are aimed at increasing savings, exports, and the
rewards for work, and decreasing debt-fuelled consumption.
The forecasts the member quotes happen to be at the
pessimistic end of a pretty wide range of current account
forecasts. I think economists are not sure yet about the
extent to which New Zealanders may or may not be changing
their behaviour. The Reserve Bank is a bit more optimistic.
For the period that the member says one forecast says the
deficit will be 8 percent of GDP, the Reserve Bank says it
will be about 5.5 percent, and 5.5 percent is closer to
sustainable.

Hon David Parker: Given that
export values have declined 11 percent over the past year,
unemployment is at the highest level for 13 years, next
year’s current account deficit is forecast by the IMF to
be the worst in the developed world, income inequality is at
the highest level ever recorded, and household savings have
turned negative again, when will he admit he has failed to
rebalance the economy?

Hon BILL ENGLISH:
I think, as I have said many times, there are certainly some
strong headwinds for the rebalancing of this economy. That
is not a reason to give up. I mean, if the member believed
his rhetoric, he would certainly not have backed a promise
to build 600,000 houses funded by the Government. That will
have all the negative effects that he is predicting.

Trans-Pacific Partnership—Forecast Economic
Benefits

Dr RUSSEL NORMAN
(Co-Leader—Green): I understand we are meant to
use these microphones.

Mr SPEAKER: Yes. I
do apologise for that, but it is to make certain that the
member will be heard on television.
[Interruption]

Dr RUSSEL NORMAN: It is
the end of school for the week, is it not?
[Interruption]

Mr SPEAKER: Order!
[Interruption] Order!

Hon Bill English:
Sing “Waltzing Matilda”.

Mr SPEAKER:
Order! That is enough.

Dr RUSSEL NORMAN:
No, that is where all your mates are.

Mr
SPEAKER: No, order! The member was provoked, I
accept that, but this must stop. I want to hear Dr Russel
Norman.

5. Dr RUSSEL NORMAN (Co-Leader—Green)
to the Minister of Finance: Does
he agree with the Prime Minister that the Trans-Pacific
Partnership agreement is worth about US$2.9 billion to the
New Zealand economy; if so, has he or the Treasury seen this
forecasting?

Hon BILL ENGLISH (Minister of
Finance): Yes, I have seen the forecasts, and I
agree with the Prime Minister that they suggest that New
Zealand’s membership of the Trans-Pacific Partnership
could be worth US$2.9 billion or 1.4 percent of GDP, I
think, by 2025. I also agree with both the Prime Minister
and the Minister of Trade, Tim Groser, that economic models
are not perfect. Sometimes they undershoot the benefits and
sometimes they overshoot them. They undershot the benefits
in calculating the value of the Closer Economic Relations
with Australia back in the 1980s. We believe that the
negotiations reflect the importance of the Trans-Pacific
Partnership. If economies come together in a trade deal that
represents around $21 trillion of GDP then we are likely to
be better off inside it than outside it.

Dr Russel
Norman: What is the name of the report that the
Prime Minister and the Minister of Finance were referencing
with regard to this forecast?

Hon BILL
ENGLISH: I can refer to a report I have here,
completed, I think, by the East-West Center. I cannot give
the member the name of a report. It sets out a range of
scenarios, and the one that the Prime Minister referred to
was what you would regard as a medium scenario, not one of
the more optimistic ones.

Dr Russel
Norman: If indeed the report was from the East-West
Center and was called The Trans-Pacific Partnership and
Asia-Pacific Integration: A Quantitative Assessment, has he
read the results of the report, which show that the baseline
case—that is, New Zealand without a Trans- Pacific
Partnership—still results in a US$2.2 billion gain to the
New Zealand economy compared with the claimed gain of around
US$2.8 billion or US$2.9 billion inside the Trans-Pacific
Partnership?

Hon BILL ENGLISH: No, I have
not read the report myself, and I would have to check with
the Prime Minister whether he has. We are following a policy
where we believe that getting better access for our
exporters to large markets is going to be better for New
Zealand because in the long run we have to earn an income,
and it is one of those things that the Government can do to
support businesses. I understand that the Greens have a
different view, and if the member became a Minister of
Finance he would probably pull us out of free-trade
agreements. I doubt that anyone—

Mr
SPEAKER: Order! The Minister should not be
speculating on that.

Rt Hon Winston
Peters: Does he agree with the demands of American
drug companies involved in the Trans-Pacific Partnership
negotiations that there needs to be a “fairer process and
more transparency” around Pharmac?

Hon BILL
ENGLISH: If the Government agreed completely with
the demands of American pharmaceutical companies, the
negotiation would probably be over. It is not. It is a long,
complex negotiation, and the New Zealand Government’s
position is to preserve the role and effectiveness of
Pharmac.

Dr Russel Norman: In light of
the East-West Center report showing relatively small gains
from being inside the Trans-Pacific Partnership, has he read
the Australian Productivity Commission report that found
that this kind of economic modelling was used to oversell
the benefits of these kinds of agreements? It was produced
by the Australian Productivity Commission with regard to
bilateral and regional trade agreements.

Hon BILL
ENGLISH: Well, it is not unusual for us to
disagree, actually, with Australian views about modelling.
We have been going through one of those over having a common
investment market between Australia and New Zealand.
Regardless of the contest of spreadsheets, we believe free
trade is a good idea. It has served our exporters well, and
we want to continue with it because it provides jobs and
incomes. We understand the member’s position. He is
opposed to more jobs and more incomes from free trade and
would pull New Zealand out of free-trade
agreements.

Rt Hon Winston Peters: Given
the Minister’s answer to my first supplementary question,
if concessions are agreed to and the American drug companies
are given a legal right to attack Pharmac processes and be
part of those processes, will the Government be able to
claim that it has defended Pharmac rather than having sold
Pharmac down the river?

Hon Steven Joyce:
Pretty hypothetical.

Hon BILL ENGLISH:
Yes, that is a bit hypothetical. I mean, if you do not do
something, you cannot claim you have not done it. The fact
is we are protecting Pharmac’s role. Any trade negotiation
amounts to weighing up compromises you might have to make of
your own direct interests with the larger benefits in the
long term of our exporters, in a small economy at the end of
the world, being able to access large markets, where it is
easier to sell our products for higher prices, because that
flows back to jobs and incomes in New Zealand. I own up to
the fact that in this negotiation we are focused on more
jobs and higher incomes. We accept that the Opposition
parties are not.

Dr Russel Norman: Has
the Minister given consideration that these kinds of
agreements may involve benefits, but they may also involve
risks, and one of those risks is the risk that was alluded
to in the previous question—the attack on Pharmac—which
could cost the New Zealand Government many hundreds of
millions of dollars if it loses the ability to use Pharmac
to drive down the price of pharmaceuticals?

Hon
BILL ENGLISH: Yes.

Dr Russel
Norman: Has the Minister looked at the costs and
risks around Pharmac with regard to the costs that may come
from investor-State disputes actions, and, in that light, is
he aware of the recent decision to award costs against the
Government of Ecuador of US$2.4 billion as a result of a
case that was brought by an oil company?

Hon BILL
ENGLISH: Yes, and yes.

Dr Russel
Norman: I seek leave to table the working paper
from the East-West Center about the potential benefits of
the Trans-Pacific Partnership.

Mr
SPEAKER: Leave is sought to table that document. Is
there any objection? There is no objection. Document, by
leave, laid on the Table of the House.

Dr Russel
Norman: In the Government’s analysis of the
benefits and costs of the Trans-Pacific Partnership, what
consideration did it give to the decision by the Australian
Federal Government to refuse to sign up to investor-State
disputes provisions because that Government took the view
that the risks to the Australian economy are too great to
sign up to investor-State dispute provisions?

Hon
BILL ENGLISH: The member can be assured that the
risks have been studied extensively. The whole business of
negotiating these agreements is precisely to weigh up the
benefits with the costs, but I have to say a New Zealand
Government has not yet signed a free-trade agreement that
was not beneficial to New Zealand. Given our objectives of
more jobs and higher incomes, we will continue to negotiate
through this agreement, bearing in mind the risks. It is
hard to understand why

the Greens-Labour Opposition seems
to be moving to a position of opposing free-trade agreements
when they have such a track record of success for New
Zealand.

Dr Russel Norman: I seek leave
to table a document from the International Centre for
Settlement of Investment Disputes, dated 5 October 2012,
regarding the decision in the case against Ecuador where
Ecuador lost a case of US$2.4 billion.

Mr
SPEAKER: Leave is sought to table that document. Is
there any objection? There is no objection. Document, by
leave, laid on the Table of the House.

Health
Facilities—Announcements

6. MAGGIE
BARRY (National—North Shore) to the
Minister of Health: What announcements has
the Government recently made on new facilities in the public
health service?

Hon TONY RYALL (Minister of
Health): This week the Government announced that
the New Zealand Blood Service in partnership with Ngāi Tahu
Property is building a new blood donor and laboratory centre
in Christchurch. The new centre is planned to open its doors
in just over 2 years’ time, and will be a purpose-designed
building that will house a donor centre, manufacturing and
testing laboratories, and specialised warehousing and
support offices. In 2011-12 the New Zealand Blood Service
collected 181,000 blood donations from 126,000 volunteer
blood donors—just over 3 percent of the population. The
new centre is important for the long-term future of the New
Zealand Blood Service to ensure the ongoing blood supply to
New Zealand public health services.

Maggie
Barry: What can the Minister tell us about a new,
multimillion-dollar mental health unit at North Shore
Hospital?

Hon TONY RYALL: The Government
has approved a new, $25 million inpatient mental health
unit—

Hon Member: How
much?

Hon TONY RYALL: —$25 million—at
North Shore Hospital. It will replace the current Taharoto
unit, which is an old maternity hospital and is no longer
fit for purpose. The new unit will not only be larger, with
seven extra beds, but doctors and nurses working in the unit
will be involved in the design to ensure it is more
user-friendly for patients and, in particular, families. I
would like to thank the member for her representation on
behalf of a number of families who have been concerned about
the standard of the facilities. The building is expected to
begin by the middle of next year and to take around 18
months to complete.

Hon Maryan Street:
Does the Minister approve of the suggested model for the new
elective surgical centre at North Shore Hospital, which
includes financial incentives for surgeons of payments of up
to $10,000 per day, and excludes training options for
younger doctors in training?

Hon TONY
RYALL: I certainly support the elective surgery
centre that is being built at North Shore Hospital at a cost
of some tens of millions of dollars. I am not sure the
member correctly characterises the features of that unit.
Certainly, those are the features that have been described
by the senior doctors union. I am right behind the elective
surgery centre because it will contribute to the more
elective operations that New Zealanders want. We are now
delivering 30 percent more elective surgery than when we
came to office.

Hon Maryan Street: Does
he see it as the way of new facilities in the public health
service that public facilities should be set up to funnel
post-operative care to the private clinics of surgeons who
work in the public facilities, as appears to be the
intention of the new North Shore elective surgical
centre?

Hon TONY RYALL: I am absolutely
certain that the elective surgery centre is going to be a
stunning example of innovation and new ideas in health.
Quite clearly, we do need to look at more productive ways of
getting services for patients using our dollars. I welcome
Dr Lester Levy and the clinicians at North Shore Hospital,
who have developed this elective surgery centre, and the
effort

they are making to get the best value for our
taxpayers’ dollars. I want more hips, knees, and cataracts
done for the people of Auckland, and this is part of
that.

Pike River Mine Disaster,
Report—Government Response

7. DARIEN
FENTON (Labour) to the Minister of
Labour: What steps is he taking to implement the
recommendations of the Pike River Mine Royal Commission
Inquiry?

Hon CHRISTOPHER FINLAYSON (Acting
Minister of Labour): The Government is moving to
implement all 16 recommendations. It regards this as an
urgent matter and, as I told the families in Greymouth a
couple of weeks ago, we will have implemented the
recommendations by the end of 2013. For example, by
reference to recommendation No. 1, which was that there
needs to be a new Crown agent focusing solely on health and
safety, that issue is being looked at by the task force and
the ministry, and I hope that there will be some particular
guidance on that matter, if not before the end of the year,
then early next year. A detailed implementation plan is just
about completed. It will be provided to the Pike River
families, in the first instance, before Christmas, and then
will be publicly released.

Darien Fenton:
Why is his department proposing a major restructuring of the
health and safety inspectorate where 150 jobs will be
disestablished and health and safety inspectors forced to
reapply for positions?

Hon CHRISTOPHER
FINLAYSON: The Government is committed to dealing
with all issues of health and safety. The task force is
working on matters, but, at the same time, the department,
even though there may be a transfer of some powers to the
new regulator, is knocking itself into shape to deal with
these issues.

Darien Fenton: What impact
will this restructuring have on the major recommendation of
the Pike River royal commission to establish a new Crown
agency that is solely focused on health and safety, or will
he instead make do with job and title reshuffling in the
Ministry of Business, Innovation and
Employment?

Hon CHRISTOPHER FINLAYSON: As
I said, the Government regards this issue—health and
safety—as a top tier issue, which is why we are giving
very serious consideration to the exact shape, form, and
function of the new regulator. The ministry is also going to
have a major policy involvement in those issues. The
suggestion that we are treating it in a cavalier
manner—which is at the heart of the member’s
question—is totally wrong.

Darien
Fenton: Is he comfortable with the Safety and
Health in Forest Operations code of practice, issued
yesterday, which ignores major recommendations coming out of
the Pike River tragedy such as the importance of employee
participation in health and safety and reciprocal
obligations on employers and employees?

Hon
CHRISTOPHER FINLAYSON: Yes, I am. Shortly after I
became the Minister I asked for a briefing on the forestry
issue. The importance of health and safety in forestry was
also emphasised to me in a productive meeting that I had
with the Council of Trade Unions a week or so ago. These
regulations had basically been prepared before the royal
commission’s report came out, so I was anxious to get them
out. The task force is looking at broader issues, and if
they need to be altered after the task force reports to the
Minister on 30 April, then that is OK by
me.

Darien Fenton: Will such alterations
that may be proposed include looking at working conditions
in industries such as forestry, where health and safety
concerns and accidents are a major contributor to accident
levels, with issues like long hours and fatigue, and will he
be doing something about the suboptimal standards that were
issued yesterday?

Hon CHRISTOPHER
FINLAYSON: The answer is yes. I think the member
makes a very fair point. There are too many deaths in this
sector, most recently a tragic death last week, and that is
why we got these regulations out, but it could well be that
they have to go further. I am very happy to consult with
both the industry and, importantly, the Council of Trade
Unions to make sure we get it right.

Electricity—North Island Grid
Upgrade

8. Peseta SAM LOTU-IIGA
(National—Maungakiekie) to the Minister
of Energy and

Resources: What
recent update has he received on Transpower’s North Island
Grid Upgrade?

Hon HEKIA PARATA (Minister of
Education) on behalf of the Minister of
Energy and

Resources: I am
delighted to announce that Transpower’s North Island grid
upgrade is complete and will be commissioned by the Prime
Minister later this afternoon. The project is one of the
largest grid upgrades in 50 years, and involved building a
new power link from Whakamaru to Auckland, at a cost of over
$800 million. This is just the start of significant
investment by Transpower in our electricity network, which
is expected to be around $5 billion over the next 10
years.

Peseta Sam Lotu-Iiga: What are the
benefits to New Zealanders of this great
upgrade?

Hon HEKIA PARATA: This upgrade
provides a number of benefits to New Zealanders. The upgrade
will provide greater electricity security of supply to the
upper North Island, and will ensure that, as cities and
communities grow, the national grid will be able to meet the
increasing demand. Aside from improved resilience and
security of the national grid, the upgrade will also
facilitate investment in new generation projects by
providing confidence to investors, as well as supporting and
facilitating the development of renewable energy by making
the grid more robust and able to manage intermittent
generation such as wind power.

Government
Appointments—Crown Company Monitoring Unit
Expectations

9. Hon PHIL GOFF
(Labour—Mt Roskill) to the Minister of
Foreign Affairs: Has he read the Owner’s
Expectations Manual prepared by the Crown Ownership
Monitoring Unit, and does he require directors he recommends
for appointment to government companies to also read that
manual?

Hon TONY RYALL (Minister of Health)
on behalf of the Minister of Foreign
Affairs: No. The Minister relies on the Ministry of
Foreign Affairs and Trade to ensure that the appropriate
checks are carried out with appointees. The ministry and the
Crown Ownership Monitoring Unit advise that the manual did
not apply in relation to the Pacific Forum Line, since it is
not a Crown company. However, the ministry requires the
normal steps to be taken in relation to declarations of
conflicts of interest and other such
requirements.

Hon Phil Goff: In view of
the requirement in the ownership manual that sets out best
practice that “Directors must disclose any relationship
and/or matters that give rise to an actual or potential
conflict of interest.”, when did Mr Kiely, as a trustee
for a shareholder in Sofrana since 2008, first disclose that
relationship to his Minister, or the ministry, or the
Pacific Forum Line board?

Hon TONY RYALL:
I understand Mr Kiely made that disclosure when it became
aware to him that Sofrana was interested in purchasing the
Pacific Forum Line. He immediately advised Mr McCully, and
he then went on to make the chair aware of a non-beneficial
interest that he had as a trustee. Mr Kiely is a man with a
considerable reputation, impeccable credentials, and a
person whom many of us have had the experience of having
acted with the highest integrity of any New
Zealander.

Hon Phil Goff: If, as the
Minister says, he advised Mr McCully, which must have been
in the last couple of months, why did not Mr McCully
remember that fact yesterday?

Hon TONY
RYALL: I am not in a position to answer that
question. What I am able to say is that I think any
allegations made by that member under the cloak of
parliamentary privilege are—

Hon Phil
Goff: I raise a point of order, Mr Speaker.
[Interruption]

Mr SPEAKER: Order! A point
of order has been called.

Hon Phil Goff:
You have often directed people asking questions to ask
straightforward questions. I think my questions have been of
that nature, today and yesterday. I am not making any
allegations; I am asking questions. Why should
I—[Interruption]

Mr SPEAKER: Order!
The reason why there was a reaction is that the member got
beyond an issue of order there. I think members realise that
this is a very tense issue that the member has raised, and
it will evoke certain feelings. I will make sure members are
careful in their replies, but some feeling in response to
implied allegations is to be expected.

Hon
Members: Oh!

Mr SPEAKER: It is
to be expected. We in this House need to be careful of the
reputations of people who cannot defend themselves in this
House, and it is something that we all need to be careful
of. The member is absolutely at liberty to ask his
questions, and I will defend his right to do
that.

Hon Phil Goff: Has the Minister
been advised that Mr Kiely, as a trustee, does not owe
duties to the trust on behalf of which he was holding shares
in Sofrana?

Hon TONY RYALL: I am
uncertain whether the Minister has received specific advice
on that matter.

Hon Phil Goff: Did
Sofrana have any interest in purchasing shares in the
Pacific Forum Line, and when did it first express that
interest?

Hon TONY RYALL: I am unaware of
when it first expressed that interest in a more general
sense, but I understand that Mr Kiely may have been
approached by Sofrana some time in July.

Hon Phil
Goff: If Mr Kiely was approached by Sofrana in
July, why was it not until 10 August that he relinquished
his association with Sofrana as a trustee for the
shareholders?

Hon TONY RYALL: Mr Kiely
disclosed it to the chair of the Pacific Forum Line and then
took action to remove himself from that
position.

Hon Phil Goff: Is it good
practice for somebody advising the Government on a share
sale to be both a trustee for the share buyer and a director
for the share seller, and not advise the ministry of
that?

Hon TONY RYALL: I think the member
is really seeking to create something out of that which
really does not exist. Quite clearly, when Mr Kiely became
aware that Sofrana had an interest he took action to advise
the chairman of the Pacific Forum Line and then took action
to remove himself from that trustee position. I think that
is entirely appropriate. Mr Kiely is a highly experienced
lawyer, who is well aware of his obligations and has served
Governments from both sides of this House. He has, I am
sure, acted with the utmost integrity.

Hon Phil
Goff: Does he dispute the answers given to me by
the Ministry of Foreign Affairs and Trade that Mr Kiely was
a key adviser on the sale of shares but had never declared
any potential conflict of interest?

Hon TONY
RYALL: He obviously did not declare any potential
conflict of interest when he became a director because none
existed at that time. When Mr Kiely became aware that there
could be a perception of a conflict as a result of
Sofrana’s interest in the Pacific Forum Line, that is when
he took the action that he did to advise the chairman, I
understand, and to subsequently remove himself from that
trustee relationship. That is what you would expect someone
to do, and Mr Kiely is a very experienced legal practitioner
and someone who acts with the utmost
integrity.

Hon Phil Goff: Should have
known better.

Hon TONY RYALL: I think it
is not on for that member to be making—

Mr
SPEAKER: Order! No. Order!

Kiwifruit
Industry—Cost of Psa Outbreak

10.
RICHARD PROSSER (NZ First) to the Minister
for Primary Industries: What is the latest estimate
by the Ministry of Primary Industries of the total cost to
the kiwifruit industry of the PSA outbreak?

Hon
NATHAN GUY (Associate Minister for Primary Industries)
on behalf of the
Minister

for Primary
Industries: The ministry does not have an estimate
of the total cost to the kiwifruit industry. However, what I
can say is that, given that around 93 percent of our
kiwifruit are

exported, the ministry does have data on the
impacts on export revenue. New Zealand exported $987 million
worth in 2009 and $1.043 billion in 2010. In 2011 this
dropped to $944 million. In the current export season,
export revenue is expected to exceed $1
billion.

Richard Prosser: How many jobs
are expected to be lost in the industry as a result of the
Psa outbreak?

Hon NATHAN GUY: I do not
have that information at hand with me
today.

Richard Prosser: Given that he cut
the front-line biosecurity budget by more than $2 million
and slashed the number of border control staff, does he
accept responsibility for the regulatory failings that led
to the Psa outbreak; if not, why not?

Hon NATHAN
GUY: The member will be aware that there was a
Sapere Research Group report that was done in relation to
the Psa outbreak. The ministry is currently working its way
through and implementing those recommendations, and they
will be concluded by next year. I do not believe that the
assertions that the member is making on any funding
discrepancies are related to the Psa
outbreak.

Todd McClay: What actions has
the Government taken in response to the Psa
outbreak?

Hon NATHAN GUY: This Government
has been working closely with the industry in its response
to Psa since it was confirmed in 2010. Almost immediately,
the Government established a $25 million response package,
matched by the industry. We continue to work alongside the
industry. Yesterday the Minister announced a new package of
support measures to be made available to the North Island
kiwifruit growers affected by Psa, and this announcement has
been well received by most.

Richard
Prosser: Is it correct that an independent review
commissioned by the Ministry for Primary Industries found
major failings in the biosecurity system; if so, what
assurances can he now give to the agriculture sector that
biosecurity failures that have devastated the kiwifruit
industry will not be repeated in other areas?

Hon
NATHAN GUY: What I can confirm is that there has
been an in-depth report done that could not conclude where
Psa came from and how it arrived here. What I can say is
that this report concluded that there should be six
recommendations. They have been adopted by the Ministry for
Primary Industries. There are 16 specific actions to be
worked through in terms of the adoption. Ten of the 16
actions were completed before the end of August this
year.

Todd McClay: What response has the
Minister seen from the industry regarding the latest
Government announcement?

Hon NATHAN GUY:
I have seen a number of very positive responses from the
industry, including Zespri, New Zealand Kiwifruit Growers
Inc., Kiwifruit Vine Health, and Horticulture New Zealand.
Horticulture New Zealand noted that “The Government has
listened to the concerns of our industry and reacted by
providing support and
reassurance.”

Sharemarket—Regulation of
Unsolicited Share Offers

11. Dr CAM
CALDER (National) to the Minister of
Commerce: What regulations came into force this
month that target unsolicited or “low ball” share
offers?

Hon CRAIG FOSS (Minister of
Commerce): From 1 December the Securities Markets
(Unsolicited Offers) Regulations came into effect to rein in
unsolicited or low-ball share offers. Alongside other
measures, the new regulations will set minimum information
requirements, including stating the market price or a fair
estimate of the value of shares, and specifying a minimum
offer period and a cancellation period.

Dr Cam
Calder: What penalties will be in place for those
who are identified as making an unsolicited share
offer?

Hon CRAIG FOSS: An individual
deemed to have made an unsolicited offer that does not
comply with an order made by the Financial Markets Authority
is liable on a summary conviction to a fine not exceeding
$30,000. Predatory or low-ball offers damage the health of,
and the confidence

in, our capital markets. These new
measures and penalties are a further deterrent to those
organisations and individuals who make unsolicited share
offers.

Development Assistance—Funding for
Climate Change Pledge

12. JAN LOGIE
(Green) to the Minister of Foreign
Affairs: Has the Government diverted money from its
aid budget in order to pay for its $30 million pledge over
three years to help developing countries address climate
change?

Hon TONY RYALL (Minister of Health)
on behalf of the Minister of Foreign
Affairs: The Government has not diverted any money
from its aid budget as described by the member. We are,
however, investing aid funding in assisting developing
countries to address climate change. This, for example, has
seen us invest money in renewable energy initiatives, such
that Tokelau is now expected to be 100 percent renewable as
a result of this investment. I am sure that would be
welcomed by the Green Party of New Zealand and its friends
in Labour.

Jan Logie: I seek leave to
table a report from Oxfam, The climate “fiscal cliff”:
An evaluation of Fast Start Finance and lessons for the
future, which shows that only 33 percent of the finance
appears to be new money.

Mr SPEAKER:
Leave is sought to table that document. Is there any
objection? There is no objection. Document, by leave, laid
on the Table of the House.

Jan Logie: I
seek leave of the House to table a statement from Oxfam New
Zealand showing—

Mr SPEAKER: Order! Is
this a press statement?

Jan Logie: Yes,
it is.

Mr SPEAKER: We do not table press
statements.

Jan Logie: Given New Zealand
signed the Copenhagen Accord, which commits us to
“scaledup, new and additional funding”, why did the
Government invest our $30 million contribution out of its
existing aid budget?

Hon TONY RYALL: It
was because this should be considered as part of the aid
that New Zealand is providing. I would quite like to quote a
report about this level of investment and this commitment
from the Government. I have read a report that says: “This
was an incredibly important step for many reasons – one it
would actually help the low income countries avert some
disasters for effective adaptation, two it would be a sign
of good faith by high income countries that could break the
gridlock in negotiations that centred around equity.”
Those comments were made by Jan Logie, MP.

Jan
Logie: I seek leave to table the Copenhagen Accord
from the United Nations Framework Convention on Climate
Change.

Mr SPEAKER: I think all members
have access to the Copenhagen Accord.

Jan
Logie: Why are the Pacific Island nations losing
aid funding to pay for a problem that they had no part in
creating and are set to bear the very worst impacts
of?

Hon TONY RYALL: It is because the
Government has joined with other countries in pledging money
to address climate change issues in the Pacific, and that
has been funded out of the aid budget. There have been some
excellent projects, such as a new 1-megawatt project in
Tonga, which will now supply 4.5 percent of—

Mr
SPEAKER: Order! I am sure these projects are
interesting, but the member asked a very specific
question.

Hon TONY RYALL: As I said, this
is part of aid to the Pacific, and it is quite appropriate
that it be funded in this way. As the Government indicated,
this was our contribution to join with the contributions of
others, and it has been achieving great projects and great
success for people in the Pacific.

Mr
SPEAKER: I thank the Minister.

Jan
Logie: I raise a point of order, Mr Speaker. I did
not ask whether investing in climate change adaptation and
mitigation was a good thing—of course it is. I asked
whether those countries should be having existing aid
programmes cut to get that.

Mr SPEAKER:
Order! The Minister did answer that question, because he
argued in his answer that the reason why that made sense was
that this is aid to those countries. That was his answer. I
cannot judge the quality of the answer. The member still has
a further supplementary, as I understand it, and can pursue
that further.

Jan Logie: Will he now
commit to continuing the funding beyond the 3-year period
currently agreed to and confirm that this funding will not
come at the expense of money for other aid
projects?

Hon TONY RYALL: I am not in a
position to give an answer to that, because that would, no
doubt, be subject to discussions with the Minister of
Finance, who, of course, is under some considerable pressure
to continue investing in the excellent performance of the
New Zealand public health service.

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